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Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81, ese 100,943 8,832 246,300 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 18 Required 2A Required 28 Cash $ S S $ 114,592 85,645 162,500 102,119 $ 464,856 Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. + 27,701 + 32,700 + 32,088 + 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 Numerator: Short-term investments Acid-test ratio Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $ 327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 I I Denominator: Current liabilities "I Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1

Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81, ese 100,943 8,832 246,300 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 18 Required 2A Required 28 Cash $ S S $ 114,592 85,645 162,500 102,119 $ 464,856 Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. + 27,701 + 32,700 + 32,088 + 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 Numerator: Short-term investments Acid-test ratio Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $ 327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 I I Denominator: Current liabilities "I Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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i need help with this acid test ratio

Required Information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Required 1A Required 1B Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81,080 100,943 Cash $ $ $ 8,832 246,300 $ 464,856 $ 114,592 85,645 162,500 102,119 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? 27,701 + 32,700 + 32,088 + Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. Required 2A Required 2B Numerator: Short-term investments 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 + Acid-test ratio + + Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 Denominator: / Current liabilities I 1 1 = Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1 = = = =
Transcribed Image Text:Required Information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Required 1A Required 1B Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81,080 100,943 Cash $ $ $ 8,832 246,300 $ 464,856 $ 114,592 85,645 162,500 102,119 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? 27,701 + 32,700 + 32,088 + Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. Required 2A Required 2B Numerator: Short-term investments 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 + Acid-test ratio + + Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 Denominator: / Current liabilities I 1 1 = Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1 = = = =
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